Chapter 41 Flashcards
Define backward vertical integration.
A joining together of two or more firms where the purchaser acquires a firm which is closer to the raw material in the production process.
Define conglomerate integration.
Conglomerate integration is a joining together of firms producing unrelated products.
Define demerger.
This is when a firm sells off a part of the business which is unrelated to the core activity.
What is the divorce of ownership from control.
The divorce of ownership from control occurs when the managers and directors of a business are different from the owners.
Define forward vertical integration.
Forward vertical integration is where a firm purchases another, which is closer to the consumer in the production process.
Define horizontal integration.
This is a joining together of firms at the same stage of the production process in the same industry.
What is a niche market?
A niche market is a small section or segment of a much larger market.
Define merger.
This is the joining together of two or more firms under common ownership.
What is a non-profit organisation.
Organisations for which making profit is not the primary aim, but any profit that they do make or surplus that they generate is used to support their other aims.
What is internal growth?
This is business growth from within, it can either be achieved by investment in capital goods, employing more workers or lengthening the amount of time employees work.
What is a private sector organisation?
Organisations that are owned by individuals or companies and not the state.
What is a public sector organisations?
Organisations that are owned and controlled by the state.
What is synergy?
When two or more firms put together can lead to greater outcomes then the sum of the individual parts.
What is vertical integration?
Vertical integration is a joining together into one firm of two or more firms at different production stages in the same industry.
